This year will demand bold, human-centric strategies from insurers as they speed delivery of their goals through better use of their workforces and technology.

That is one of the headline findings from Deloitte’s Insurance Predictions 2026 report, which adds companies will become sharper in their use of AI as they start to demand a return on spending.

As premium rates soften and margins come under pressure, boards and management will need to carefully balance where to invest, what to prioritise and how quickly to move, according to the consulting giant.

Deloitte says it will be a big year for geopolitical shifts, rapid technological change, climate pressures and regulatory overhauls.

It makes eight predictions for the Australian industry in 2026:

1. Finance will shift from “getting the numbers out” to helping leaders steer the business. Boards are becoming impatient with finance that only explains last month.

As AI becomes embedded, there will need to be clear ownership, testing, boundaries and a qualified human in the loop who can say: “That doesn’t look right.”

“Don’t cut the accountants and actuaries out of the system build,” Deloitte warns.

2. Successful execution of strategy will depend on people. The war for scarce digital and AI talent continues, with insurers needing to integrate AI and advanced technologies to redesign how work is done and how teams are structured.

Workforce reshaping must include operating model evolution, with clearer product or value stream orientation, new decision rights and teams designed around human-AI collaboration rather than legacy processes.

While senior leaders set ambition and technology teams deploy tools, front-line leaders must be equipped to translate change into day-to-day behaviours.

They are responsible for redesigning workflows, reallocating responsibilities, maintaining productivity during disruption and sustaining morale as roles evolve. Without equipping and aligning this layer of leadership, even the best-designed transformation will stall in execution.

3. Generative AI will take hyperpersonalisation to a new level, enabling reimagination of the customer life cycle. AI and customer experience will move closer together to disrupt everything from a customer’s points of discovery through to claims and comparing and switching plans.  

4. Insurers will pivot from broad AI experimentation to a ruthless focus on measurable return on investment. Expect to see pruning of initiatives that fail to demonstrate tangible value.  

After a year of significant investment and hype, companies are demanding a clear return on their AI spending, moving from “eye-catching demos” to a period of serious engineering, where progress is measured by reliability, governance, and technology architecture and data foundations that allow AI to be deployed at scale.

This will drive a flight to quality, with investment channelled into targeted applications in areas such as claims, underwriting and customer interactions.

5. Regulatory pressure will intensify, moving beyond financial reporting to demand demonstrable progress on operational resilience such as through prudential standard CPS 230, AI governance and climate risk management.

6. Insurers will increasingly deploy a fusion of AI, advanced analytics and automation to create a highly efficient, scalable and effective claims function. This will shift the role of claims professionals from manual processing to managing complex judgments with empathetic customer engagement.

7. Insurers will use more granular climate data and modelling to price risk, driving premium increases and tighter appetite in high-risk zones. They will increasingly explore product design and pricing mechanisms that reward policyholder risk mitigation and allow for the impact of government resilience funding.

8. The industry will be forced to fundamentally reshape its approach to mental health claims, moving from a reactive claims-based model to a proactive, preventative ecosystem built on cross-sector collaboration.

The current model is unsustainable. Public sector and private sector insurers providing support for disability claims are under significant financial pressure, leading to increasing premiums.

The high cost and complexity of mental health care have made many products unaffordable and inaccessible, eroding profitability and consumer trust and exposing the legacy nature of product design and claims processes relative to modern workplace practices and job roles.  

With the increasing prevalence of mental health conditions showing no signs of slowing, insurers cannot solve this alone.

A structural response is needed, requiring partnership with healthcare providers, employers and government to build an ecosystem more focused on prevention, early intervention, better care pathways, improved mental wellbeing, and insurance products and services that better support community needs.